A blockchain is a distributed ledger that records data across a network of nodes. However, not all blockchains are the same. Depending on who can read from, write to, and control the network, blockchains fall into three main types: public, private, and consortium.
In this lesson, you'll break down each types of blockchain. You'll discover how each serves a unique purpose, from decentralized finance (DeFi) to secure enterprise operations. This lesson goes beyond simple definitions, teaching you to describe how different blockchain systems are structured and governed with precision and confidence. Master the core vocabulary developers and companies use, including permissioned vs. permissionless networks, Sybil resistance, decentralize autonomous organizations (DAOs), and more.
🔓 Public Blockchains: Open and Transparent
A public blockchain is permissionless, meaning anyone can join the network, validate transactions, and view the ledger. These blockchains are fully decentralized in both technical architecture and governance, relying on Sybil resistance mechanisms like Proof of Work (PoW) or Proof of Stake (PoS), combined with consensus protocols such as Nakamoto-style consensus or Gasper, to maintain network security and agreement.
In simple terms: Public chains are open, transparent, and not controlled by one person or group. They use built-in coins (tokens) to reward people for keeping the network safe.
Key Characteristics:
Open participation: Anyone can run a node, submit transactions, or deploy smart contracts
Transparency: All data is publicly visible and verifiable
Decentralization: No single entity controls the network's governance or technical infrastructure
Token-based economy: Native cryptocurrencies (e.g., ETH for Ethereum) incentivize honest behavior
Trustless operation: Participants don't need to trust each other, only the underlying cryptographic protocols
Examples:
Ethereum – a general-purpose smart contract platform powering DeFi, non-fungible tokens (NFTs), and DAOs
Bitcoin – the original blockchain network, designed for decentralized peer-to-peer currency
Solana – a high-performance chain focused on speed and low transaction fees
Use Cases:
DeFi – open financial services like lending, borrowing, and trading without intermediaries
NFTs – digital ownership of art, collectibles, and assets
Open-source protocols – decentralized apps and services anyone can use or contribute to
Borderless payments – global money transfers without banks or third parties
🔒 Private Blockchains: Fast, Secure, and Controlled
A private blockchain is permissioned and typically controlled by a single organization. Access is restricted to invited participants. These blockchains prioritize privacy, speed, and governance control. They often using different consensus mechanisms than public chains and centralizing governance while potentially maintaining technical distribution across multiple nodes.
In simple terms: Private blockchains are controlled by one company or group. Only invited people can use them. They’re faster and more private than public ones.
Key Characteristics:
Restricted access: Only authorized users can read or write to the ledger
Centralized governance: A single entity manages permissions, updates, and network rules
Higher performance: Faster throughput and lower latency due to fewer nodes and alternative consensus mechanisms (such as Practical Byzantine Fault Tolerance or even centralized validation)
Data confidentiality: Internal transactions are hidden from the public
Trust-based model: Participants trust the controlling organization rather than relying on cryptographic consensus alone
Examples:
Hyperledger Fabric – an open-source, enterprise-grade platform (hosted by the Linux Foundation) used for supply chain and identity systems by companies like Walmart
R3 Corda – a blockchain platform designed for regulated financial institutions, focusing on secure, private data sharing and contract settlement
Use Cases:
Enterprise supply chains – tracking goods and verifying origin in closed industrial ecosystems
Internal asset tracking – monitoring and auditing digital assets within a single company
Financial settlement between known parties – like interbank transfers where privacy is essential
Healthcare record systems – securely managing sensitive patient data with strict access control
🧩 Consortium Blockchains: A Balance of Control
A consortium blockchain is also permissioned, but control is shared between multiple trusted organizations instead of one central authority. This design balances efficiency with shared governance, making it suitable for industry-wide collaboration while maintaining privacy from external parties.
In simple terms: Consortium blockchains are shared by a group of trusted companies. They work together to manage the system. It’s more private than public chains, but less controlled than private ones.
Key Characteristics:
Group control: Multiple entities (e.g., banks, logistics firms) jointly manage the network
Semi-decentralized: More decentralized than private chains but less than public ones, with governance distributed among consortium members
Flexible design: Participants can agree on custom consensus rules and permission structures
Improved coordination: Streamlines operations between competitors or partners
Selective transparency: Typically transparent within the consortium but opaque to outsiders
Examples:
ConsenSys Quorum – an enterprise-focused blockchain platform (originally developed by JPMorgan) used for finance and compliance-sensitive environments
Energy Web Chain - consortium for energy sector coordination
Use Cases:
Cross-bank settlements – speeding up fund transfers between institutions while preserving compliance
Trade finance networks – managing documents and workflows between importers, exporters, and banks
Supply chain collaboration – sharing data between multiple companies in a supply chain while maintaining competitive privacy
Insurance claims processing – automating trust and verification across insurers and reinsurers
⚖️ Comparison Summary
Feature | Public Blockchain | Private Blockchain | Consortium Blockchain |
|---|---|---|---|
Access | Open to anyone | Restricted to authorized users | Restricted to consortium members |
Governance | Decentralized | Centralized (single entity) | Shared among member organizations |
Speed & Scalability | Slower due to consensus overhead | Faster with streamlined consensus | Moderate speed with multi-party consensus |
Transparency | Fully transparent to all | Confidential to organization | Transparent within consortium, private externally |
Trust Model | Trustless (trust in protocol) | Trust-based (trust in controlling entity) | Partially trust-based (trust among known parties) |
Consensus | PoW or PoS with public consensus protocols | Centralized approval or protocols like PBFT | Custom BFT-style consensus among trusted members |
Conclusion
Understanding these blockchain types helps developers and organizations choose the right architecture for their goals. While public chains support maximum decentralization and openness, private and consortium chains offer more control, privacy, and efficiency. This makes them particularly suitable for enterprise use cases where regulatory compliance, data privacy, and performance are critical considerations.
🏆 Complete the Lesson
You've just completed a deep dive into the different types of blockchains. The next step is to solidify your new knowledge.
Test your understanding and see how much you've learned.
